You have the option of two equally risk annuities, each paying RM5,000 per year for eight years. One is an annuity due and the other is an ordinary annuity. If you are going to be receiving the annuity payments, which annuity would you choose to maximize your wealth?

Select one:

a. the annuity due.

b. either one because they have the same present value.

c. Since we don't know the interest rate, we can't find the value of the annuities and hence we cannot tell which one is better.

d. the ordinary annuity.